Migration Regulations 1994 - Specification of Minimum salary levels for the subclass 457 - Temporary Business (Long Stay) Visa - IMMI 09/109 (Cth)
Commonwealth of Australia
Migration Regulations 1994
MINIMUM SALARY LEVELS FOR THE SUBCLASS 457 – TEMPORARY BUSINESS (LONG STAY) VISA
(SUBPARAGRAPH 2.79(2A)(c)(ii), SUBREGULATION 2.79(3A) AND SUBPARAGRAPH 2.82(2)(aa))
I, CHRIS EVANS, Minister for Immigration and Citizenship, acting under subparagraph 2.79(2A)(c)(ii), subregulation 2.79(3A) and subparagraph 2.82(2)(aa) of the Migration Regulations 1994 (‘the Regulations’):
1.SPECIFY the method for working out a level of salary at any point in time for the purposes of subparagraph 2.79(2A)(c)(ii) and subregulation 2.79(3A) of the Regulations.
(1) This item specifies the method for working out a level of salary at any point in time for the purposes of subparagraph 2.79(2A)(c)(ii) and subregulation 2.79(3A) of the Regulations.
(2) For this item, a level of salary must be paid on a weekly, fortnightly or monthly basis.
(3) If:
(a) a person holds a Subclass 457 Business (Long Stay) visa; and
(b) the person works, on average, more than 38 hours per week in a period;
the person’s minimum salary level, for the period, is:
where:
ABS is the person’s applicable base salary.
HW is the number of hours worked by the person in the period.
Note The denominator 1982.745 represents the number of working hours in an average year, based on a 38 hour working week and taking into account leap years.
(4) If:
(a) a person holds a Subclass 457 Business (Long Stay) visa; and
(b) subitem (3) does not apply to the person;
the person’s minimum salary level, for the period, is:
where:
ABS is the person’s applicable base salary.
W is the number of weeks in the period.
Note The denominator 52.1755 represents the number of weeks in an average year, taking into account leap years.
2.SPECIFY the applicable base salary of the holder of a Subclass 457 Business (Long Stay) visa.
(1) This item specifies the applicable base salary of the holder of a Subclass 457 Business (Long Stay) visa.
(2) Subject to subitem (4), if:
(a) a person was granted a Subclass 457 visa on the basis of a nomination of an occupation under regulation 1.20G of the Regulations; and
(b) the nomination was approved under regulation 1.20H of the Regulations (prior to 14 September 2009); or
(c) the person was granted a Subclass 457 Business (Long Stay) visa on the basis that subclause 457.223(2) of Schedule 2 to the Regulations was met;
the person’s applicable base salary is:
(d) $61 920 for ICT occupations listed at Schedule A; and
(e) $45 220 for all other occupations.
Certified Regional Employment Arrangements
(3) Subject to subitem (4), if:
(a) a person was granted a Subclass 457 Business (Long Stay) visa on or after 1 July 2006;
(b) the visa was granted on the basis of a nomination of an occupation under regulation 1.20GA of the Regulations; and
(c) the nomination was approved under regulation 1.20H of the Regulations (prior to 14 September 2009);
the person’s applicable base salary is
(d) $55 725 for ICT occupation listed at Schedule A; and
(e) $40 705 for all other occupations.
Visa holder to whom subclause 457.223 (6) applied
(4) If:
(a) a person was granted a Subclass 457 Business (Long Stay) visa on or after 10 September 2007; and
(b) the visa was granted on the basis that subclause 457.223 (6) of Schedule 2 of the Regulations applied to the person;
the person’s applicable base salary is $81 040.
Note 1 Nominations made under regulation 1.20GA related to certified regional employment arrangements under the Subclass 457 visa program. These nominations were certified by a regional certifying body and visa holders are required to live and work in specified regional areas. All other nominations were made under regulation 1.20G.
Note 2 All nominations approved prior to 14 September 2009 were approved under regulation 1.20H, regardless of whether they were made under regulation 1.20G or 1.20GA.
Note 3 Subclause 457.223(2) relates to Labour Agreements.
Note 4 Subclause 457.223(6) provides that the Minister may specify a level of salary above which, provided the grant of the visa is also in the interests of Australia, the criteria relating to English language proficiency set out in paragraphs 457.223(4)(eb) (and prior to 14 September 2009, 457.223(5)(fb)) of the Regulations need not be satisfied.
3.SPECIFY, for comparison with the minimum salary level calculated under item 1, the amount of salary paid to a person in a given period:
(a) includes the person’s base salary before tax and separate from any allowances, bonuses, packaged items (other than those mentioned in (b) (ii)) and the like; and
(b) excludes any deductions from that amount except:
(i) Pay As You Go (PAYG) taxation; and
(ii) any amount that would be 100% tax deductible (for the person) or otherwise exempt from Fringe Benefits Tax (FBT).
Note 1 Deductions excluded by paragraph (b) may be made from amounts not included in paragraph (a).
Note 2 Businesses should seek their own professional advice on whether an item is 100% tax deductible or otherwise exempt from FBT. Further information is available from the Australian Taxation Office website: examples
UExample 1U – In this example, the Department is monitoring a private hospital in Brisbane to check to see whether the hospital paid at least the minimum salary level last financial year to Susan, a nurse they sponsor on a Subclass 457 visa.
Susan worked 50 hours a week for 52 weeks (2 600 total hours) and was paid a weekly salary of $875 before tax. The total payments for the financial year were $45 500.00 before tax.
Susan falls within the scope of subitem 2(2), as:
· her nomination was not certified by a regional certifying body (Brisbane is not a regional area) and therefore made under regulation 1.20G of the Regulations (paragraph 2(2)(a) and note 1 at the end of item 2 refer); and
· it was approved prior to 14 September 2009 (paragraph 2(2)(b) refers).
In these circumstances her applicable base salary is $45 220.
As Susan worked an average of more than 38 hours a week, the applicable minimum salary level for the financial year can be worked out by applying the formula set out in subitem 1(3) of this Notice:
U$45 220 x 2 600 hours U= $59 297.59
1982.745
The amount of salary paid to Susan in the given period was $45 500.00, which is less than the applicable minimum salary level in the circumstances: $59 297.59. The hospital has therefore breached their undertaking to pay Susan the minimum salary level.
If Susan had only worked 38 hours a week, the hospital would have been paying above minimum salary level and therefore would not be in breach of the minimum salary level undertaking.
Example 2U – In this example, a Perth marketing firm wants to check whether they have met the minimum salary level for the previous fortnight pay period for Rita, a marketing specialist they sponsor on a Subclass 457 visa. This differs from Example 1 as it considers the impact 100% tax deductible items have in relation to the minimum salary level.
Rita works 38 hours a week and was paid a fortnightly salary of $1 750 before tax. Rita elected to salary package a mobile phone/PDA to keep track of her many work appointments and to make work calls and agreed in writing to forego $50 per fortnight of her salary to make the lease payments. In Rita’s circumstances the mobile phone/PDA is 100% tax deductible.
Rita’s fortnightly before tax salary of $1 750 has only one component, using the concept of amount of salary paid to a person in a given period (at item 3):
–base salary including FBT exempt items: + $1 750
Rita falls within the scope of subitem 2(2), as:
· her nomination was made under regulation 1.20G of the Regulations (paragraph 2(2)(a) and note 1 at the end of item 2 refer); and
· it was approved prior to 14 September 2009 (paragraph 2(2)(b) refers).
Therefore, the applicable base salary is $45 220 per year.
As Rita worked 38 hours per week in the given period, the minimum salary level for the previous fortnight can be worked out by applying the formula set out in subitem 1(4) of this Notice:
U$45 220 x 2 weeks U= $1 733.31
52.1775
As the deduction is 100% tax deductible and does not impact on the amount of salary paid to Rita in the given period ($1 750), Rita is being paid above the minimum salary level of $1 733.31.
Had the $50 deduction UnotU been 100% tax deductible or otherwise exempt from Fringe Benefits Tax, then the amount of salary paid to Rita in the given period would have been $1 700 ($1 750 - $50 deduction), which is below the minimum salary level of $1 733.31. If this were the case, Rita’s employer would have breached their undertaking to pay the minimum salary level. U
Example 3U – In this example, a company in Bourke wants to check whether they have met the minimum salary level for the previous fortnight pay period for John. This differs from the Examples 1 and 2 as it considers the impact allowances and tax deductions in combination have in relation to the minimum salary level.
John works 38 hours a week and was paid a fortnightly payment of $1 900 before tax which included Living Away From Home Allowance (LAFHA) of $200. The business also deducted $500 from John’s before tax salary because he has elected to salary package a car. In John’s circumstances the car was not 100% tax deductible or otherwise exempt from FBT.
John’s fortnightly before tax salary of $1 900 has three components, using the concept of amount of salary paid to a person in a given period (at item 3):
–base salary including FBT exempt items: +$1 700
–other allowances: +$200 LAFHA
–non FBT exempt deductions: - $500 salary packaged car
John falls within the scope of subitem 2(3), as:
· he was granted his visa after 1 July 2006 (paragraph 2(3)(a) refers)
· his nomination was certified by a Regional Certifying Body and therefore made under regulation 1.20GA of the Regulations (paragraph 2(3)(b) and the note at the end of item 2 refer);
· it was approved prior to 14 September 2009 (paragraph 2(3)(c) refers)
Therefore, the applicable base salary is $40 705 per year.
As John worked 38 hours per week in the given period, the minimum salary level for the previous fortnight can be worked out by applying the formula set out in subitem 1(4) of this Notice:
U$40 705 x 2 weeks U= $1 560.25
52.1775
The business could use the LAFHA ($200) salary component to pay some of the $500 deduction for the car from John’s before tax pay. The $300 balance, would then be subtracted from the base salary component $1 700 – $300 = $1 400.
This means that the actual amount of salary paid to John for the fortnight is $1 400, which is less than the applicable minimum salary level of $1 560.25. The business has therefore breached their undertaking to pay John at least the minimum salary level.
4.SPECIFY for the purposes of paragraph 2.82(2)(aa) a record of the hours worked by a primary sponsored person to whom subregulations 2.79(2A) or 2.79(3A) of the Regulations apply.
Note 1 Subparagraph 2.79(2A)(c)(ii) of the Regulations provides that certain primary sponsored persons’ salaries must not be less than the minimum salary level worked out and paid in a way specified in writing for the purposes of that paragraph.
Note 2 In accordance with paragraphs 2.79(2A)(b) and 2.79(2A)(d) of the Regulations, subparagraph 2.79(2A)(c)(ii) only applies to primary sponsored person who were the subject of a nomination approved prior to 14 September 2009 and only applies until immediately prior to 1 January 2010. From 1 January 2010, the terms and conditions of employment provided to all primary sponsored persons must be no less favourable that the terms and conditions of employment that are provided, or would be provided, to Australian citizens and Australian permanent residents performing equivalent work at the same workplace in the same location in accordant with subregulation 2.79(2).
Note 3 Subregulation 2.79(3A) of the Regulations provides that, for the purposes of terms and conditions set out in a work agreement, the Minister may specify that a minimum salary level is to be worked out in the way specified in writing for the purposes of that subregulation.
Note 4 Paragraph 2.82(2)(aa) of the Regulations provides that the Minister may specify a kind of record that must be kept in writing for the purposes of that paragraph.
This Instrument, number IMMI 09/109, commences on 14 September 2009.
Dated 10 September 2009
CHRIS EVANS
Minister for Immigration and Citizenship
SCHEDULE A
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